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By SHABBIR H. KAZMI
Updated Feb 19, 2001

The week under reicew witnessed a very volatile market. Market complexion changed and moved in either direction simply on the basis of half yearly results of PSO and Shell Pakistan. However, the upward movement of Badla rate indicates that people have started taking positions. Market punters are spilit whether KSE-100 index will upwards or down wards but profit taking opportunities will rule the movement.

ASKARI COMMERCIAL BANK

Askari Commercial Bank has released its full year, ending December 31, 2000, financial results registering nearly 12 per cent increase in profit after tax as compared to previous year— from Rs 282.4 million for the year 1999 to Rs 315.6 million for the year under review. This increase is mainly due to fall in its effective tax rate from 60.4 per cent to 58.1 per cent for the year 2000. The Board of Directors has recommended payment of 15 per cent dividend and issue of 5 per cent bonus shares. Total income increased from Rs 1,398.8 million for the year 1999 to Rs 1,564.7 million for the year 2000 mainly due to increase in fees based income, profit from investment securities, dividend income and other operating income. The Bank's focus has been on generating trade finance income due to the fast turnover of cash. Lately, it has begun to approach the retail market. The Bank has emerged more prudent relatively to some other listed banks and probably the best capitalized bank.

PAKISTAN STATE OIL COMPANY

The Company enjoying the largest market share in POL business has registered nearly 55 per cent increase in sales — from Rs 45,251 million for July-December 1999 period to over Rs 70,021 million for the six-months period of the year 2000. This increase in sales is mostly attributed to increasing prices of POL products and not mainly due to any significant increase in volume. It is expected that the Company also got inventory gains of over Rs 380 million during this period. The overall gross margin decreased from 5.5 per cent to 4.65 per cent during this period. The Company was also able to keep cost within limits. The increase of nearly 19 per cent in charges and expenses from Rs 1,238 million to Rs 1,471 million implies a major restructuring within the organization. There was also a jump in other income from Rs 52.4 million to Rs 226.5 million. Therefore profit after tax increased by over 58 per cent — from Rs 856.8 million to Rs 1,355.4 million during the period under review. The Company has announced 40 per cent interim dividend.

SHELL PAKISTAN

Despite a 10.5 per cent decrease in operating profit for July-December 2000, as compared to corresponding period of the previous year, the Company was able to maintain its interim dividend payout to 45 per cent at the time of announcement of half yearly results. Two factors seems to be responsible for this decrease, 1) deregulation of furnace oil business and its impact on company and 2) growing competition and reducing market share in lubricants business. While sales improved from Rs 29,419 million to Rs 36,709 million the increase in cost of goods sold eroded gross profit. On top of this, there was nearly 44 per cent increase in operating cost. Yet another factor was 84 per cent increase in financial cost — from Rs 13.240 million to Rs 24.361 million during this period. The earning per share also came down by 2.33 per cent — from Rs 14.16 to Rs 13.83. According to some analysts, earnings for the full year are expected to go down further mainly due to the one time extraordinary gain of Rs 200 million booked last year which will not be repeated this year.

PAKISTAN REFINERY

The half yearly results, for the period ending December 31, 2000, indicates an improvement in profit after tax as compared to the corresponding period of the previous year. However, this increase was from non-refinery operations, from Rs 14.594 million for the six-months of 1999 to Rs 21.232 million for the corresponding period under review. At the same time excise duty and development surcharge expense went up from Rs 216 million to Rs 375 million but the reimbursement from government came down from Rs 1,441.5 million to Rs 1,397.3 million during this period. Another factor which eroded profit was higher financial charges during this period registering an increase from Rs 42.2 million to Rs 48.6 million during this period.

SAFA TEXTILE MILLS

For the six-months period ending December 31, 2000 the Company has experienced a significant turnaround — from an operating loss of Rs 8.7 million for the six-months period of 1999 to an operating profit of Rs 3.9 million for the corresponding period of year 2000. During this period of 1999 other income of Rs 11 million provided some respect. Accumulated profit has helped the Company in reducing accumulated losses from Rs 13.9 million as at December 31, 1999 to Rs 9.85 million as at December 31, 2000.

MOVEMENT AT A GLANCE

SCRIP

HIGH
(Rs.)

LOW
(Rs.)

CLOSING 
PRICE

TURNOVER
 (SHARE MN)

PTCL

21.40

20.75

21.10

156,833,000

HUBCO

21.15

19.75

21.15

190,591,500

PSO

162.90

154.50

158.30

127,364,500

Shell

335.50

295.00

306.00

3,194,000

SSGC

11.35

10.80

11.05

2,275,500

Askri Comm. Bank

16.45

15.15

15.25 9,361,000

Pakistan Refinery

27.00

24.95

25.25 10,300
Source: Invest Capital & Securities